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Business Description: Retail Food Group Limited (RFG) is an Australian retail food brand manager, franchisor and wholesale coffee roaster. The Company designs, develops and manages retail franchise systems and is the intellectual property owner and manager of retail and coffee brands. The Company is organised into two major operating divisions namely franchising operations, and wholesale/ retail operations.
Strategy Analysis: Eighty percent of outlets are located in high foot traffic shopping centres to take advantage of small change customer spending. Stagnant shopping centre development has forced management to consider non-traditional sites to continue outlet growth. Franchisee health is a focus with efforts centred on the fortification of average weekly sales via menu enhancement and product innovation, and leveraging input suppliers. Management also pursue acquisitions which provide opportunities to increase EPS, scale, synergies, organic growth and intellectual property. Acquisitions will not necessarily be limited to the food and franchising sector.
Retail Food Group reported NPAT up 0.72% to $14.63m for the half-year ended 31 December 2012. Revenues from ordinary activities were $70.81m, up 25.5% from last year. Diluted EPS was 12.5 cents compared to 13.4 cents last year. Net operating cash flow was $10.29m compared to $13.14m last year. The interim dividend declared was 9.5 cents, compared with 8.5 cents last year.
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